U.K. banks must keep the promises they made on increasing lending, Prime Minister Gordon Brown's spokesman said Monday, ahead of a meeting later in the day between Chancellor of the Exchequer Alistair Darling and bank executives.

"Clearly it's the prime minister's view that we want to see the banks lend at the levels they have agreed to lend at," he said.

The spokesman said the government believes U.K. banks have "sufficient" resources to meet their lending commitments, thanks in part to the capital injection and insurance against losses being provided by the government.

The prime minister has said he expects to see U.K. banks increase lending by GBP70 billion this year.

That includes some GBP39 billion in extra lending agreed by Lloyds Banking Group (LYG) and Royal Bank of Scotland (RBS), both of whom have received large injections of taxpayer money. Other U.K. lenders, including HSBC Holdings PLC (HSBA.LN) and Barclays PLC (BARC.LN)) have also said they would increase mortgage and consumer loans.

Asked if the prime minister believed the banks would meet their commitments, the spokesman noted the year is only half complete but said "we need to keep monitoring this."

Sunday, Darling said he was extremely concerned about lending to small and medium-sized companies.

"It seems that while the cost of borrowing has gone down charges to smaller companies has gone up," he said.

The British Bankers Association said Monday that various forms of lending to small businesses from U.K. high street banks increased by GBP391 million on the month in June, a sign of easing credit conditions.

U.K. Business Secretary Peter Mandelson said the government would focus on the cost of lending in Monday's meeting with bank chiefs.

"They (banks) will argue that it is not so much the supply of lending but the demand for it," he said in a television interview. "No doubt both of these, demand and supply factors are relevant, but the chancellor and I are not satisfied that lending is as it should be."

Figures published by the European Central Bank earlier showed companies in the 16 countries that use the euro also face financing constraints which could hamper the recovery from recession.

The ECB said the annual growth rate of private-sector loans in the euro zone slowed to a record low of 1.5% in June from 1.8% in May.

-By Laurence Norman, Dow Jones Newswires, +44 207 842 9498; laurence.norman@dowjones.com (Nicholas Winning contributed to this article)